Cornell Chronicle

Alpert says:

“Q3 GDP will be perhaps the most backward-looking number ever reported in economic history. 

“The huge GDP growth it will indicate is growth off a level severely depressed by a first-ever lockdown of much of the U.S. economy. The measure itself is meaningless.

Those interested in assessing the real condition of the U.S. economy (albeit in the rear-view mirror) should instead look at annualized 2020 first three quarters (Q1 through Q3) GDP and compare it to actual 2019 GDP.

“But even that does not speak to the real condition of the U.S. economy today. Forecast GDP in Q4 is now down-trending, and if we do not get relief out to households and businesses, November and December are likely to take Q4 into actual contraction.

“Unemployment is at deep recessionary levels and consumer spending is now headed for a fall as the household savings amassed during the CARES Act relief period is vanishing. Consumer incomes ran well behind spending in September with more of that to come.

“Moratoria on rent payments, and some debt payments, are being extended. And some private lenders are forbearing (as they have little option to do otherwise). But the bills to households and business are mounting up as the pandemic crisis rolls on and on. This will worsen with no additional relief and pose an enormous headwind to growth going forward.

“Barring huge federal government transfers into the economy, to households, firms and state and local governments, Q1 2021 will put us back into technical recession.

So, Q3 GDP? A statistical nothingburger.”